The very notion used to beg disbelief -- until the U.S. began flirting with default. Here's the way forward

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October 21, 2013 4:15PM (UTC)

The very title used to beg disbelief – until now. We have all heard of “failed states” – the Somalias, Chads and, quite possibly, Iraqs and Afghanistans of this world. The U.S. government shutdown and always looming default notwithstanding, there simply is no way one can refer to the United States, the world’s remaining superpower, in a similar fashion. Or can one?

States, it is said, don’t fail overnight. It is also true that the seeds of their eventual destruction are sown deeply within their political institutions. That certainly makes the contemporary United States a possible candidate.

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A country’s success or failure has to be measured against that nation’s inherent potential. To be sure, a large amount of natural factor endowment, from which the United States definitely benefits, makes it much less likely that a state will ever fail.

By the same token, a country endowed with great natural beauty and riches may be tempted to act rather recklessly and actively undermine its potential. Recent U.S. events clearly point to that danger.

As if to bat away any consideration of the United States in such a context, there is mantra-like talk about the innovativeness of the American economy, the sense of risk-taking, the level of entrepreneurship, the scale effects, as well as the rapidity with which new ideas can penetrate markets.

15 items in urgent need of fixing

All true – but also look at this stunning list of shortcomings:

1. Washington, the U.S. capital, is riveted with forbidding infighting that mirrors how deeply divided the country is.

2. The U.S. Civil War in the 21st century may be fought out in a very different territory than Somalia’s, but it is not really that much more forgiving. Plenty of people even get shot.

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3. For all its riches and for all the celebration of the civil rights era, the United States still has to overcome the legacy of racism. For evidence, look no further than the incarceration rates of young black males.

4. Also look at the blight of the downtown areas of some of America’s formerly proudest and richest cities. Think Detroit, Cleveland or Chicago. There are entire parts of these cities that are “no go” zones.

5. All that misery is there not because there is not enough money available in the country to fix the issues. The wallet is there, but not the will.

6. The country also still suffers from the belief that only short-term strategies can fix its problems, including when it comes to education and training.

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7. It resists any systematic efforts at tackling this and other challenges, declaring them as “socialism,” while deluding itself with the quaint idea that “being American” is enough to succeed.

8. Despite a lot of entrepreneurialism, on the two big challenges of our time – energy and the environment – Americans have come up with plenty of ideas but no real policy or successful track record of innovation and investment.

9. The country remains wedded to the promotion of feudalist economic values. Politicians of both parties are always eager to serve the upper crust, rather than seeking to counteract the market-driven excesses of further increases in income inequality.

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10. Hispanics continue to be considered an inconvenient afterthought, rather than becoming the focal point of social and economic planning for the future, given the importance of their success for a viable U.S. economic future.

11. Workers of all colors are often still treated as aliens – and unions even worse. In the supposedly refined American capitalism, the powers that be basically still hold to an inimical view of the workforce. People are viewed as disposable assets.

12. For decades, middle-class Americans wanted to convince themselves, and were convinced by their politicians, that the problem for the United States was just a black underclass. How wrong that was. Economic destitution is an equal opportunity destroyer, regardless of race. The old racism has morphed into color-blind classism.

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13. For a nation this rich, closing one’s eyes and letting poverty fester is as irresponsible as it is shortsighted. It is also extremely cynical. The same elites that celebrate America’s vitality also point to U.S. population growth. They interpret it as an indicator of future growth potential and a reason for optimism.

14. They do not make the connection that over 50% of new babies are born to minority families, most of them in the bottom third of the U.S. income distribution.

15. And they ignore the fact, especially critical under these circumstances, that well-functioning and well-resourced public schools are the key to maximizing these youngsters’ future potential. There are politicians in virtually every U.S. state that fight hard to keep these immigrant kids out of community colleges, arguing that they are stealing precious education dollars from Americans.

Literal vs. lateral thinkers

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Literal thinkers will state categorically that the United States, unlike Somalia and Afghanistan, does not have warlords. Lateral thinkers, in contrast, would question that. They understand that warlords can also exist at a much higher level of economic development. And for evidence, they would point to the way in which Republicans now operate in Washington and many state capitals.

A country can be destitute simply because it happens to be located in a God-forsaken place on earth. But it may not be failing, owing to great human efforts of its people to beat the admittedly long odds.

The United States, in its current constitution, seems to be adamant about showing that even very rich and well-endowed nations can be on track of failing. Who would have ever thought?

Stephan Richter

Stephan Richter is the publisher and editor-in-chief of The Globalist, the daily online magazine, and a columnist in newspapers around the world. He is also the presenter of the Marketplace Globalist Quiz, which is aired on public radio stations all across the United States. In addition, Mr. Richter is a keynote speaker at international conferences -- and the author of the 1992 book, “Clinton: What Europe and the United States Can Expect.” Follow him on Twitter @theglobalist.